3 Reasons Why Real Estate Still a Good Investment

There are two basic reasons for investing into real estate. The first is to become a homeowner and finally live in that dream house you’ve been dreaming of for years. The second reason is to create a revenue stream that might turn into a “river” depending on the circumstances. Although the real estate market has taken a big hit in the past several years, there are signs that it is coming back around. All of this begs the question, “Is real estate still a good investment?” Consider these potential benefits:

For Homeownership:

You get to build equity every month. With every mortgage payment, you are increasing your equity share in the home. That means the longer you live there, the more money you can make by selling or refinancing or borrowing. Think of your home as a big piggy bank. The more you put in, the more you can take out!

You get big tax deductions for mortgage interest, closing costs and property tax. Those tax breaks can take the sting out of making those payments!

You’ll pay less than a rental. Although the initial costs of buying a home will put a serious dent in your savings, over time you might find the monthly payments are cheaper than what you’re currently paying in rent. Wouldn’t it be nice to pay off your own home instead of your landlord’s?

For Rental Properties:

Interest rates are low, which makes buying a rental property at this time a good investment.

Because there are still foreclosed properties out there, you might be able to score a great deal on a home or condo that needs a little TLC but can become a terrific moneymaker.

Renters prefer a house to an apartment. That means fixing up a little cottage can command a better price than an apartment and your rental home will be in greater demand. You can certainly cover the costs of your mortgage plus a little extra each month.

Thanks to sites like AirBnb and VRBO, there are more opportunities to make money with a rental property in a good location. These sites don’t charge for owners to list. You could find that renting them out for three weeks out of the month will create a nice cash flow and you can enjoy them for the fourth week. Win/win.

The real estate market is open for anyone with good credit and a down payment. In other words, it is not an exclusive club just for moguls who have the inside track. As with any type of investment, you have to be smart about your choices. Just because a property has a low sales prices doesn’t mean it is automatically a good deal. You need to consider how much money you’ll have to invest in order to make that place livable. If you’re setting up a rental property, you also should be prepared not to have it rented all the time. This could mean making two mortgage payments (one on your current home and one on your rental property).

Oh, and the third reason why real estate is a good investment?  Pride-in-Ownership!  People who own real estate generally have pride in owning their own piece of land that they can call ‘home’.

Are you thinking about investing in real estate?